Government Support & Advice
The Government is issuing a continuous flow of information and guidance for employers, employees and businesses on how to deal with the impact of Covid-19. Here, we summarise the most up to date, key information issued to help protect you and your business.
- Please NoteThe Government has launched a Coronanavirus Business Support Finder Tool - click here
- Government Funding Schemes
- Coronavirus Job Retention Scheme
- CJRS for Public Sector Organisations
- Self-Employed Income Support Scheme
- Company House Filing
- VAT Payment Deferral Plan
- HMRC Time to Pay
- Small Business & Retail, Hospitality & Leisure Grants
- Bank of England Rate updates
- Dedicated Phone Support
- Covid-19 Guidance for Employers, Businesses and Employees
- SSP concerning Covid-19
- Scottish Government Updates
Essential Updates for Individuals:
On 27 April The Chancellor announced the Bounce Back Loan scheme for small businesses. The new fast-track scheme aims to provide loans that offer a 100% government-backed guarantee for lenders.
HOW IT WORKS
The scheme allows businesses to borrow between £2,000 and £50,000, having access to the cash within a few days.
These loans are interest free for the first 12 months. More information on how to apply for the loan can be found here.
The scheme launched on Monday 4th may 2020 and businesses will be able to access these loans through a network of accredited lenders.
The other government funding support schemes for businesses are as follows:
The FUTURE FUND SCHEME, this is intended for start-up businesses and VC-backed or EIS-funded Businesses. It will issue convertible loans between £125,000 to £5 million to innovative business facing financing struggles due to COVID-19. These convertible loans may be an appropriate option for those businesses that depend on equity investment and cannot access the Coronavirus Business Interruption Loan Scheme (CBILS).
The COVID CORPORATE FINANCING FACILITY, is intended to support larger businesses, with the Bank of England stating it will buy Commercial Paper issued by investment grade companies at the prices that existed on 1 March 2020. This will help prevent those businesses who rely on Commercial Paper from running out of liquidity. This is only for investment grade businesses which tend to be large entities and typically listed companies, or government backed with low levels of gearing.
The BUSINESS INTERRUPTION LOAN SCHEME, is intended to provide banks and funds an 80% guarantee on loans of up to £5m for businesses with a turnover of up to £45m. The government is also providing the first 12 months of interest and fees.
The Treasury has set out new rules for the CBILS, detailing the:
Removal of personal guarantees
- Business owners who are borrowing below £250,000 will not have to give personal guarantees.
- For loans above £250,000, personal guarantees will be capped at 20% of the outstanding value of the loan.
Small business pre-requisite requirements
Previously, government-backed loans for small businesses were only available to firms that were unable to secure regular commercial financing.
- In the chancellors update on 3rd April, "all viable small businesses affected by COVID-19, and not just those unable to secure regular commercial financing, will now be eligible should they need finance to keep operating"
- It is important to note, companies wanting to take out these loans will still be 100% liable for the debt and the government has not set a cap on the interest rate banks can charge.
- Operational changes are also being made to speed up the lending process, with details to follow.
The CORONAVIRUS LARGE BUSINESS INTERRUPTION LOAN SCHEME will give government guaranteed loans of 80% up to £25m to businesses with revenues between £45m and £500m.
8th July 2020:
There will be £1,000 bonuses per employee for employers who bring their staff back from furlough and keep them in work until the end of January 2021. The employee will need to earn more than £520 per month on average over the period and payments to employers will not start until February 2021. It does mean that there is a three-month gap effectively from the CJRS arrangement coming to an end on 31 October and CJRS bonuses being paid in February 2021.
12th June 2020
From July 1st there will be two Furlough CJRS “arrangements” that qualifying employees can be furloughed under:
- Full Furlough (as has been in place since March 1st) where an individual does no work and is furloughed fully.
- Flexible Furlough – available from July 1st, where the employee returns to work for a proportion of their contractual hours only.
Note that as an employer, you can only make a CJRS wage claim and corresponding NIC and Pension claim for the hours an employee is "on furlough" in the period.
This has made the CJRS process more complex as both the wages and working hours need to be calculated when on Flexible Furlough. These updates have been designed to help employers get back to normal by providing support whilst employees return to work but also to lessen the Government support.
Please click through to our flexible furlough page for examples of how this could be implemented or our CJRS FAQs for more in-depth information on the scheme. As always, if you would like help to administer this scheme, please do get in touch.
The government expects that the scheme will not be utilised by many public sector organisations, as most public sector employees must continue to deliver essential public services or assist in mitigating the coronavirus effects.
If an employer receives public funding for staff costs, and that funding is maintained, it is expected that the employer uses this money to carry on paying staff in the same way as usual – and not furlough them. Additionally, this applies to non-public sector organisations who receive public money for employee costs.
Organisations which are providing necessary services to respond to the impacts of COVID-19 and receiving government support, are not expected to furlough staff.
In a few cases, for example if organisations are mainly funded by the government and whose staff cannot be redeployed to help with the coronavirus effects, the scheme may be appropriate to cover staff costs.
More information from the Government can be found here.
The Chancellor has announced the much anticipated financial support for the self-employed: the Self-employed Income Support Scheme, which will pay a taxable grant of 80% of average monthly profits over the last 3 years (based on the tax returns filed for the 3 years to 5 April 2019) up to a maximum of £2,500.
This scheme will run for 3 months but can be extended if necessary. This level of grant and time period has been designed to be in line with the Coronavirus Job Retention Scheme (CJRS), the scheme to support the employed that was announced last week.
There are some conditions for the Scheme:
- This will only be open to people with trading profits of up to £50,000.
- The majority of income must be from self-employment.
- It is only available to those who have submitted tax returns with self-employment income for 2019. The Chancellor has given those who have not filed 2019 tax returns four weeks to submit these in order to qualify.
HMRC will administer the scheme and will contact all eligible individuals directly to ask them to apply and payments will be made in one lump sum. This is expected to be up and running by June. Those who have not been self-employed for three years, the grant will be based on the one or two returns filed. Those who started self-employment after 6 April 2019 will not qualify for the scheme.
Due to the delay between the loss of income and the grants through this scheme, the Chancellor has recommended that those with cash flow issues should utilise Universal Credit and the Business Interruption Loan Scheme.
A future change?
The Chancellor made ‘an observation’ that it does not seem right that the self-employed are subject to a different tax regime when they are being supported in the same way as the employed. This suggests there are changes on the horizon for the taxation of the self-employed in the future.
Businesses will be given an additional 3 months to file accounts with Companies House to help organisations avoid penalties as they deal with the impact of COVID-19. Companies still have to apply for the 3-month extension to be approved. Those with clear issues around COVID-19 will be automatically and immediately granted an extension. Applications can be made through a fast-tracked online system which will take just 15 minutes to complete.
HMRC has announced further support for businesses by deferring Valued Added Tax (VAT) payments for 3 months for all UK businesses.
The deferral will apply to VAT payments due in the period from 20 March 2020 until 30 June 2020.
How to access the scheme
This is an automatic offer with no applications required. Businesses will not need to pay VAT that falls due for payment during this period and are advised to cancel their direct debits to ensure HMRC do not collect the payment automatically. VAT returns must be submitted as usual during this time. Taxpayers will be given until 31 March 2021 to pay the VAT that has been deferred. VAT refunds and reclaims will be paid by HMRC as normal.
MTD digital link extension
HMRC has also granted an extension to all MTD businesses to form digital links between all parts of their functional compatible software. Therefore, all organisations now have until their first VAT return period starting on or after 1 April 2021 to implement digital links.
- Self-assessment payments on account due on 31 July 2020 will be deferred until 31 January 2021.
- An increase to the Universal Credit standard allowance by £1,000 a year for the next 12 months, by £1,000 a year.
- The Working Tax Credit basic element is also increasing by the same amount.
- Self-employed people will be able to access, in full, Universal Credit at a rate equivalent to Statutory Sick Pay for employees.
HMRC’s “Time to Pay” scheme is designed to support businesses and individuals struggling to make tax payments.
These allow viable business and individuals to make payment(s) over a period that they can afford. Arrangements are tailored to the ability of the customer to pay and are typically for a few months although they can be longer.
To be eligible for “Time to Pay” you must pay tax to the UK Government and have outstanding tax liabilities.
More information can be found here.
For any business in the retail, hospitality and leisure sector there will be no business rates payable for the tax year 2020/21. Businesses can also receive:
- In England, the Small Business Grant Fund (SBGF) of £10,000 if receiving Small Business Rates Relief (SBRR) and Rural Rates Relief (RRR) and are in line with the eligibility criteria. If you already receive small business rates relief (including the sectors above) you will receive a cash grant of £10,000. This grant was mentioned in the budget at a rate of £3,000 – this has now been increased to £10,000.
- In England, under the Retail, Hospitality and Leisure Grant (RHLG) if businesses receive the Expanded Retail Discount (which covers retail, hospitality, and leisure) and have a rateable value below £51,000, you will be eligible for the following cash grants per property.
- £10,000 grant, if an eligible business in these sectors with a property that has a rateable value of up to £15,000 and in line with the eligibility criteria.
- £25,000 grant, if an eligible business in these sectors with a property that has a rateable value of over £15,000 and less than £51,000 and in line with the eligibility criteria.
Businesses with a rateable value of £51,000 or over are not included in this scheme and non-rate paying organisations in the business rates system are not eligible for this scheme.
The rates holiday and cash grants will be dealt with through local authorities. There will be no requirement to claim these. You should receive them automatically.
More information can be found here.
Statutory Sick Pay concerning COVID–19 will be refunded by businesses with less than 250 employees, for up to two weeks per employee. Sick pay has also been extended for those who have to self-isolate, even if not ill, and sick notes will be available from NHS number 111.
Employment Allowance Will Increase from £3,000 to £4,000 from April 2020. Please note this will only be available to businesses which have a Class 1 Secondary NICs bill of £100,000 or less in the previous tax year.
There will also be increases in the flat-rate deduction for homeworking from April 2020, to cover additional household expenses from £4 per week to £6 per week. This is typically paid to help employees with the additional costs of heating the home, water usage etc.
Before the 2020 UK Budget, the Bank of England announced:
- an interest rate cut from 0.75% to 0.25%. This has now been cut to 0.1%.
- a four-year loan scheme of up to £100bn at this rate for small businesses; and
- a loosening of the capital rules for banks to encourage lending.
These measures are an attempt to calm the financial and economic markets. These followed similar rate cuts around the world and have been welcomed. This rate cut announcement is the first outside the regular monthly announcements and illustrates the severity of the situation in the UK and wider global economy finds itself in.
HMRC has made 2000 staff available to help if:
- You cannot pay your tax bill due to the coronavirus
- You cannot pay your self-assessment tax bill and want to pay in instalments online (only if you owe less than £10,000). If you have already set up a payment plan online, you do not need to contact HMRC. If you’ve missed a payment date or are unable to use the online service contact the self-assessment payment helpline here.
- You are unable to pay other taxes and have received a payment demand such as a tax bill or legal action letter (call the HMRC office which sent you the letter or the Payment support services).
- You are a nominated partner in a business partnership you can also agree time to pay with HMRC for the partnership or individual.
- Encourage employees to work at home, wherever possible.
- Ensure that if someone becomes unwell in the workplace with a new, continuous cough or a high temperature, they are sent home and stay at home for two weeks.
- Remind employees to wash their hands for 20 seconds or more, frequently and use tissues for coughs and sneezes.
- Continually, clean and disinfect objects and surfaces that are touched regularly.
- Support employees to adhere to the advice to stay at home to reduce the spread of coronavirus (COVID-19) to others.
- Be aware that those who stay at home will be eligible for statutory sick pay (SSP) from the first day of their absence from work.
- Use your discretion with the requirement for medical certification for employees who are unwell. This alleviate pressure on GPs so they can focus on their patients.
- If evidence is of illness is required, those with symptoms of coronavirus can get an isolation note from NHS 111 online, and those who live with someone that has symptoms can get a note from the NHS website
- Encourage employees from defined vulnerable groups to stay at home and work from there if possible.
Please see here for more detailed government advice. This guidance will be updated as the situation changes.
A £100 million package of additional grant support for small and medium sized businesses (SMEs) and newly self-employed people opened on 30 April.
The three separate funds are being administered by local authorities and Scotland’s enterprise agencies and will start to pay out grants in early May.
This £100m support package is made up of the following funds:
- A £34 million Newly Self-Employed Hardship Fund, managed by Local Authorities, will be allocated to the newly self-employed who are ineligible for UK support (as they became self-employed since April 2019) but are facing hardship, with £2,000 grants.
- A £20 million Creative, Tourism & Hospitality Enterprises Hardship Fund, managed by the Enterprise Agencies with support from Creative Scotland and VisitScotland for small and micro creative, tourism and hospitality companies not receiving business rates relief with grants of up to £25K.
- A £45 million Pivotal Enterprise Resilience Fund controlled by the Enterprise Agencies giving bespoke grants and wrap around business support to viable SMEs who are essential to the local or national economic foundations of Scotland but are currently vulnerable.
The Scottish Government is also providing an additional £1 million to the Creative Scotland’s Bridging Bursaries in the not-for-profit sector.
To find out more and apply, please click here.
Below are the additional actions the Scottish Government is taking to aid businesses including measures worth £2.2 billion, starting 1 April:
- a full year’s 100% non-domestic rates relief for retail, hospitality and tourism
- £10,000 grants for small businesses in receipt of the Small Business Bonus Scheme or Rural Relief
- £25,000 grants for hospitality, leisure and retail properties with a rateable value between £18,000 and £51,000
- a 75% rates relief for retail, hospitality and leisure sectors with a rateable value of less than £69,000 from 1 April 2020
- 1.6% relief for all properties, effectively freezing the poundage rate next year
- an £80 million fund to provide grants of at least £3,000 to small businesses in sectors facing the worst economic impact of COVID-19
- a fixed rates relief of up to £5,000 for all pubs with a rateable value of less than £100,000 from 1 April 2020
- extending the go live date for the deposit return scheme to July 2022
- halting the introduction of the Visitor Levy Bill
The £2.2 billion package of support for business supersedes the £320 million announced on 14 March after the Chancellor’s announcement on 17 March.
Please see the Scottish government website here for further information.
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