What Help and Support is Available for UK Businesses Affected by Coronavirus (COVID-19)?

Help for UK Businesses Affected by Coronavirus

Updated 23.3.20 The information below is kept under continuous review and is updated often.

For business owners, the next months are going to be uncertain and disruptive. Many will be pushed to the brink of insolvency, while others will survive in a radically diminished state. The government, however, has released an unprecedented package of help for Britain’s businesses.

This page explains what those are, and how to apply for them.

We’ll keep this page updated regularly as the situation continues, to ensure it provides a complete picture of the support available.

HMRC Time to Pay Agreements for Businesses Affected by Coronavirus

One of the most commonly used measures by HMRC to preserve cash-flow in struggling businesses is their Time to Pay Agreement (TTP) These allow business owners to pay HMRC over time instead of all at once

Usually, these TTP agreements come with a 3.5% penalty charge but, according to Chancellor Rishi Sunak’s recent budget this will be waived for the duration of the virus.

HMRC have even set up a new helpline for business owners, with 2000 staff ready to offer advice and support.

If you concerned about not being able to pay HMRC, this should be your first port of call.

HMRC Coronavirus Helpline
Telephone: 0800 015 9559
Monday to Friday, 8am to 8pm
Saturday, 8am to 4pm

See the governments full page on support for small businesses here

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Emergency Loans from High Street Banks

Many high street banks in the UK are already offering emergency loans to at risk businesses as a way of easing the financial strain of the coronavirus.

Businesses dependent upon supply chains beginning in China, for example, have been some of the earliest hit, as are those awaiting payments for clients in quarantine overseas.

Natwest, as an example, is going further than this with ‘loan repayment holidays, interest rate reductions, temporary emergency loans with no fees or immediate access to deposit balances with no penalty. ‘

EMeRGENCY Bank loans at a glance
NatWest, Lloyds, HSBC, and Bank of Ireland have already announced emergency loan offerings
– Measures will include the removal of certain fees and the possibility of payment holidays for the worst affected.

Refund for Statutory Sick Pay (SSP) Payments

Amendments to the law known as the The Statutory Sick Pay (General) (Coronavirus Amendment) Regulations 2000 came into force on 13 March for an initial period of 8 months.

These state that anyone who self-isolates will be entitled to Statutory Sick Pay (SSP) from Day One. Employers of small and medium sized companies will be reimbursed by employers the first 14 days of this, with the repayment mechanism to be announced in due course.

For those who are self-employed or who fall below what is called the Lower Earnings Limit ( set at £118 a week) there will be an Employment and Support Allowance through the welfare system.

SSP Refunds at a glance
  • This refund will cover up to 2 weeks per eligible employee
  • Companies with 250 employees or fewer will be eligible
  • Employers will not need GP notes for their claims
  • Statutory sick pay amounts to £94.25 per week

100% Business Rates Discount for one Year in Certain Sectors 

Part of new chancellor Rishi Sunak’s budget was the assurance that retail, leisure and hospitality businesses with a rateable value of less than £51,000 would be exempt from paying business rates over the next financial year, as a measure to protect the economy from the impact of the coronavirus outbreak.

The chancellor also extended this to include Museums, art galleries, theatres; caravan parks and gyms; small hotels and B&Bs; sports clubs, night clubs; club houses, and guest houses.

At a glance
– Eligible retail, leisure and hospitality businesses with a rateable value of less than £51,000 are exempt
– Pubs will received an increased discount on their rates from £1,000 to £5,000 (as long as their rateable value is below £100,000 in England)

The Coronavirus Business Interruption Loan Scheme

Replacing the Enterprise Finance Guarantee Scheme, the Coronavirus Business Interruption Loan Scheme is designed to offer funding to businesses who might otherwise be turned down for finance by conventional banks.

Funded by the British Business Bank (the government), the scheme’s details, specifications and eligibility are still being agreed.

The essential mechanism is that businesses apply to an agreed lender, with the government itself providing the loan security of up to 80%. They will be interest free for 12 months.

CBILS will faciliate:

  • Overdrafts
  • Invoice finance facilities
  • Asset finance facilities
  • Term Loans

Which are the accredited lenders and partners for the Coronavirus Business Interruption Loan Scheme?

See the full list here: https://www.british-business-bank.co.uk/ourpartners/supporting-business-loans-enterprise-finance-guarantee/efg-accredited-lenders/

CBILS eligibility at a glance
– UK businesses with a turnover of less than £41m p.a.
– Must operate within an eligible sector (it covers most of them)
– The borrowing proposal itself must be sound

The Covid Corporate Financing Facility (CCFF)

Appropriate only for substantial businesses, this will provide funding to businesses by selling commercial paper (debt) of up to one-year maturity to the government.

To check eligibility visit the Bank of England’s page here: https://www.bankofengland.co.uk/news/2020/march/the-covid-corporate-financing-facility

If you believe you are eligible you need to check with your bank if they will issue the commercial paper. If not, yuo can see a full list of banks which do here.

The Coronavirus Job Retention Scheme

The governments job retention scheme will cover up to 80 per cent of wage costs, and will backdated to 1 March for a period of three months or longer, if needed. The sectors covered are:

  • Small businesses
  • Charities
  • Not for profit organisations

Grants due to be available to business within weeks.

How to Apply for the Job Retention Scheme

Firstly, busineses will need to:

  • Designate affected employees as ‘furloughed workers,’ and tell your employees of this change
  • Inform HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC has yet to set out further details on the information required, watch this space..)

HMRC will reimburse 80% of furloughed workers wage costs, up to a cap of £2,500 per month. HMRC are working urgently to set up a system for reimbursement. Existing systems are not set up to facilitate payments to employers.

A £3000-10,000 Coronavirus Grant for Small Businesses That Pay No Rates

For the 700,000 small businesses currently eligible for eligible for Small Business Rate Relief (SBBR) or Rural Rate Relief, the government has introduced emergency funding measures.

These make the possibility of a £3000 grant available although no information exists yet about how this will be accessed.

The best bet may be to follow the existing route to get Small Business Rates Relief by contacting your individual council here.

Help for the Self-Employed

As of Friday March 20th, self-employed people are now able to access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.

Self assessment payments have also been deferred to Jan 2021 for the self employed.

VAT Deferred

Deferring the next quarter of VAT through to the end of June (those payments can now be paid at the end of the financial year)

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.

What Else is the UK Government Doing to Support Businesses Affected by Coronavirus (COVID-19)

The rollout of the IR35 reforms to the private sector has been postponed by one year.

As of 17th March, the Chancellor has confirmed an initial £330 billion of guarantees – equivalent to 15% of UK GDP for businesses needing support. This is a huge increase on the initial £12bn promised last week.

This is not a time for ideology and orthodoxy, this is a time to be bold, a time for courage. I want to reassure every British citizen this government will give you all the tools you need to get through this.

Chancellor Rishi Sunak, BBC
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Is Your Business in Serious Trouble Because of Coronavirus?

Here at Company Debt our mission is to helped stressed directors through difficult circumstances. We’re here to help you with practical advice, immediate assistance and a friendly, professional response.

Here are the steps you can take:

  1. Take advantage of a free call, or livechat, with one our experts. Tell us about your situation, and we’ll give you the benefit of our experience to suggest the best way forward.
  2. We’ll advise on whether there is government funding you can apply for, or private funding to fill the gap in your current income.
  3. Are you already receiving creditor pressure? Find out what your legal situation is, and what are your options for survival by speaking with our team.
  4. Do you need help mediating a Time to Pay Arrangement with HMRC. We have a lot of experience negotiating with HM & Revenue and know the right approach.
  5. If closure is the right option, we can advise on the most painless way to get this done.
  6. Advice on Personal Guarantees and whether your risk personal liability for your company debts.
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