chemistry-4932607_640.jpgCovid-19 Government Support for Businesses

Last updated: 27/3/20

THe UK Government has announced a large number of measures to support businesses through the coronavirus crisis.  As thee unfold, we'll update this page regularly.  You may also want to visit the relevant HMRC web page.  Please note: We have separate pages which deal with;

1. VAT

  • You do not need to pay any VAT between 20th March 2020 and 30th June 2020. You have until April 5th 2021 to pay any VAT liabilities accumulated during the deferral period.
  • All UK businesses are eligible.
  • This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds will be given in the usual timescale.

Q. I pay by Direct Debit.  Will HMRC automatically take the VAT if I don't cancel it?

A. At the moment, they are saying they will take any VAT due if there's still a direct debit in place.  Their latest guidance is "Customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. Please do so in sufficient time so that HMRC do not attempt to automatically collect on receipt of your VAT return."

2. Income Tax

  • For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
  • If you are self-employed you are eligible.
  • This is an automatic offer with no applications required.
  • No penalties or interest for late payment will be charged in the deferral period.  HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities.

3. Business rates holiday for retail, hospitality and leisure businesses

  • There is a business rates holiday for retail, hospitality and leisure businesses in England for the 2020 to 2021 tax year.  Businesses that received the retail discount in the 2019 to 2020 tax year will be rebilled by their local authority as soon as possible.
  • You are eligible for the business rates holiday if:
    • your business is based in England
    • your business is in the retail, hospitality and/or leisure sector
    • Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
      • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
      • for assembly and leisure
      • as hotels, guest & boarding premises and self-catering accommodation
  • ·         There is no action for you to take. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill automatically to exclude the business rate charge. They will do this as soon as possible.

4. Cash grants for retail, hospitality and leisure businesses

  • The Retail and Hospitality Grant Scheme provides grants of up to £25,000 per property.  For businesses in these sectors with a rateable value of under £15,000, they will receive a grant of £10,000.  For businesses in these sectors with a rateable value of between £15,001 and £51,000, they will receive a grant of £25,000.
  • You are eligible for the grant if:
    • your business is based in England
    • your business is in the retail, hospitality and/or leisure sector
    • Properties that will benefit from the relief will be occupied hereditaments that are wholly or mainly being used:
      • as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
      • for assembly and leisure
      • as hotels, guest and boarding premises and self-catering accommodation
  • ·         You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

5. Support for nursery businesses that pay business rates

  • There is now a business rates holiday for nurseries in England for the 2020 to 2021 tax year.
  • You are eligible for the business rates holiday if:
    • your business is based in England
    • 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
  • There is no action for you to take. This will apply to your next council tax bill in April 2020. However, local authorities may have to reissue your bill to exclude the business rate charge. They will do this as soon as possible.

6. Support for 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 (SBBR), 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 small business and already receive SBBR and/or RRR
    • you are a business that occupies property
  • You do not need to do anything. Your local authority will write to you if you are eligible for this grant.

7. Support for businesses through the Coronavirus Business Interruption Loan Scheme

  • A new temporary Coronavirus Business Interruption Loan Scheme (CBILS), delivered by the British Business Bank, is now in place to support primarily small and medium-sized businesses to access bank lending and overdrafts.
  • 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 not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value.
  • You are eligible for the scheme if:
    • your business is UK based, with turnover of no more than £45 million per year
    • your business meets the other British Business Bank eligibility criteria
  • The full rules of the Scheme and the list of accredited lenders is available on the British Business Bank website. All the major banks are offering the scheme, including (click to visit bank);
  •   The sort of questions you'll need to answer "yes" to are;
    • Are you an existing bank customer?
    • Are you requesting funding of £25,000 or more?
    • Is your enquiry for finance as a result of the Coronavirus pandemic?
    • Are you a small or medium-sized enterprise with a turnover of less than £45m?
    • If you’re borrowing less than £5m in total (including any existing Enterprise Finance Guarantee loans), is this for a maximum of 6 years?
    • Does, or will, your business generate 50% or more of its income from selling goods or providing services?
    • Is your business based in the UK, and will the loan be used to support trading in the UK?
    • Is the main reason for seeking finance to support investment, increase working capital, fund business growth or acquisitions, or to refinance existing borrowing?
  • There are a few types of business or organisation who aren't eligible for the scheme -
    • Banks, Building Societies or Insurance.
    • Primary and General secondary education.
    • Business and employers membership organisations; trade unions; religious organisations; political organisations, or households as employers of domestic personnel.
    •  Undifferentiated goods- and services-producing activities of private households for own use.
  • If you have an existing loan with monthly repayments you may want to ask for a repayment holiday to help with cash flow.

Q. How do I apply?

A. Your bank may well accept either online applications or paper applications with forms available online for you to complete.  If you can't find these, or aren't sure how to complete them, you should talk to your bank or finance provider as soon as possible.  We believe phone lines are very busy so allow some time to queue if you're telephoning the bank.

8. Support for businesses paying tax: Time to Pay service

There's nothing specific at the moment about paying PAYE or Corporation Tax liabilities.  However, 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.  We have a dedicated page for this, but in brief;

These arrangements are agreed on a case-by-case basis and are tailored to individual circumstances and liabilities.

You are eligible if your business:

  • pays tax to the UK government
  • has outstanding tax liabilities

If you have missed a tax payment or you might miss your next payment due to COVID-19, please call HMRC’s dedicated helpline: 0800 024 1222.  If you’re worried about a future payment, please call nearer the time.

9. Support for self employed workers: Grant

Self-employed workers will be able to apply for taxable grants worth up to 80% of their average monthly profits to combat loss of income due to the coronavirus pandemic. The grants will be capped at £2,500/month though and not everyone will be able to claim.  We have full details on who's eligible, when you'll get the money and what to try in the meantime on our dedicated news page dealing with this topic.

10. Support for employers: Furlough and the job retention scheme

If employer and employee both agree, you might be able to keep employees on the payroll if they’re unable to operate or have no work  to do because of coronavirus (COVID-19). This is known as being ‘on furlough’. You could get paid 80% of your wages through the Coronavirus Job Retention Scheme, up to a monthly cap of £2,500.  WE have full details on how the scheme works, and when you'll get your money, on our dedicated page for employers.