COVID-19: Guidance for Businesses

COVID-19: Guidance for Businesses

To support businesses through this period of disruption caused by COVID-19, the Government has released a number of support packages. As with the nature of the situation, information is rapidly changing. To ensure you stay up-to-date, keep checking this page for all latest announcements, or visit the governments dedicated financial support page for businesses.

(This page was last updated 15 April 2020).

1. Coronavirus Job Retention Scheme

All UK employers will be able to access support to continue paying part of their employees’ salary for those employees that would otherwise have been laid off during this crisis. This scheme is not yet live.

This is what you need to do to access the scheme once live:

  • designate affected employees as ‘furloughed workers,’ and notify your employees of this change – changing the status of employees remains subject to existing employment law and, depending on the employment contract, may be subject to negotiation
  • submit information to HMRC about the employees that have been furloughed and their earnings through a new online portal (HMRC will set out further details on the information required)

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.

2. Statutory Sick Pay

For those now self-isolating or caring for someone self-isolating, Statutory Sick Pay (SSP) can now be claimed as a result of COVID-19. SSP will be available from day 1, rather than day 4.

The repayment will cover up to 2 weeks starting from the first day of sickness, if an employee is unable to work because they either have coronavirus or cannot work because they are self-isolating at home.

Employers will be able to reclaim expenditure for any employee who has claimed SSP as a result of COVID-19. This applies to all businesses with 250 or fewer employees (as of 28 February 2020) and covers all types of employment contracts including:

  • full-time employees
  • part-time employees
  • employees on agency contracts
  • employees on flexible or zero-hour contracts

The rebate scheme is not yet live and is currently being developed.

3. Business Rates Holiday for Retail, Hospitality and Leisure

All retail, hospitality and leisure businesses in England will pay no business rates for the 2020 – 2021 tax year.

Properties that will benefit from the relief will be those that are wholly or mainly being used as:

  • shops, restaurants, cafes, drinking establishments, cinemas and live music venues
  • for assembly and leisure
  • and hospitality such as hotels, guest and boarding premises and self-catering accommodation.

Full details on eligibility can be seen here.

4. Cash grants

Grants totalling more than £231 million for eligible businesses will begin to be paid as part of the Government’s support package. 

There are three grants available:

  1. £10,000 for businesses that pay no business rates and currently receive Small Business Rate Relief
  2. £10,000 for retail, hospitality and leisure businesses with a rateable value of less than £15,000
  3. £25,000 for retail, hospitality and leisure businesses with a rateable value of between £15,000 and £51,000

You will need to have the below information to hand in order for you to complete the necessary form:

  • Business Rates Account Number (easiest found on your business rates bill)
  • Rateable value
  • Business Rates Account Number
  • Company House Number or
  • National Insurance details for sole traders
  • VAT registration number
  • Any State Aid details (previous grants received)

Full details on eligibility can be seen here.

5. Self-employment Income Support Scheme (SEISS)

Those that are self-employed will be able to claim a taxable grant worth 80% of your trading profits up to a maximum of £2,500 per month for the next three months.

HMRC will use the average profits from tax returns in 2016-17, 2017-18 and 2018-19 to calculate the size of the grant. The scheme is open to those who have profits of less than £50,000.

The SEISS is not yet live. The scheme will be open for an initial three months with people able to make their first claim by the beginning of June. In the interim, the self-employed will still be eligible for other government support including universal credit. More information can be found here.

6. The Coronavirus Business Interruption Loan Scheme

To support small and medium sized businesses to access loans, overdrafts, invoice finance and asset finance, a Coronavirus Business Interruption Loan Scheme has been launched by the British Business Bank.  The Government will not charge businesses or banks for this guarantee, and the Scheme will support loans of up to £5 million in value, up to 6 years. The Government will also cover the first 12 months of interest payments.

Businesses from any sector can apply except the following:

  • Banks and building societies
  • Insurers and reinsurers (but not insurance brokers)
  • Public-sector organisations, including state-funded primary and secondary schools

The scheme will run for 6 months and is now open for applications. To apply, you should speak directly with your bank. 

7. Support for larger firms – Coronavirus Large Business Interruption Loan Scheme (CLBILS)

The CLBILS provides a government guarantee of 80% to enable banks and commercial lenders to make loans of up to £25m to firms with an annual turnover of between £45m and £500m. The scheme will support a wide range of businesses to access finance products including short term loans, overdrafts, invoice finance and asset finance.

Businesses from any sector can apply except the following:

Banks and building societies
Insurers and reinsurers (but not insurance brokers)
Public-sector organisations, including state-funded primary and secondary schools
The scheme is not yet live with details due to be announced end of April.

To support companies which are fundamentally strong, but have been affected by a short-term funding squeeze, the new Covid-19 Corporate Financing Facility (CFF) will buy short term debt from larger companies. The scheme is now live and will operate for 12 months. More information including eligibility is available on the Bank of England website.

8. VAT Deferral & Tax Support

The Government will support businesses by deferring Valued Added Tax (VAT) payments due between 20 March 2020 and 30 June 2020.

No applications are required and is eligible for all UK VAT-registered businesses. During this period, you will not need to make VAT payments normally due with VAT returns. You will be given until 31st March 2021 to pay any liabilities that have accumulated during the deferral period. It is important that any customers who normally pay by direct debit should cancel their direct debit with their bank if they are unable to pay. More information can be accessed here.

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. Arrangements are agreed on a case-by-case basis and are tailored to individual circumstances. The HMRC have a dedicated helpline to help with any concerns or worries regarding paying tax due to COVID-19. Please call: 0800 024 1222.

9. Deferral of Self-Assessment Payment

The Self-Assessment payment on account that is ordinarily due to be paid to HMRC by 31 July 2020 may now be deferred until January 2021. The deferral is optional and is only intended to assist those who are suffering hardship as a result of the coronavirus. There are no applications required for this, just ensure payment is made by January 2021.

10. Insurance

The Government’s advice for the public to avoid pubs, restaurants and other social places should have no effect on insurance claims if a business has in place cover for both pandemics and government-ordered closures.

Businesses are however encouraged to check the terms and conditions of their specific policy and contact their providers. Unfortunately, most businesses are unlikely to be covered, as standard business interruption insurance policies are dependent on damage to property and will exclude pandemics.