The UK Government’s response to coronavirus (COVID-19), announced in the Chancellor’s Budget 2020 speech and subsequent briefings, includes measures to protect businesses from the economic impact. With all of the UK’s businesses now facing a more challenging year, here are some of the key details and sources of guidance.
Support for businesses
An overview of the support currently available:
| Relief | Details | Administrator |
| Statutory Sick Pay (SSP) | Payable from Day 1 for eligible individuals diagnosed with coronavirus or those unable to work because of self-isolation More information about SSP for affected employees |
Employers |
| Business rates retail discount |
Increased to 100% for the next 12 months and extended to leisure & hospitality sectors |
Automatic from Local Authorities via (reissued) council tax bill |
| Small business rate relief |
Grant of £10,000 to retail, hospitality and leisure businesses if rateable value of commercial property is under £15,000 |
Automatic from Local Authorities. Ministry of Housing, Communities & Local Government has published guidance for local authorities |
| Small business rate grants | £25,000 grants to retail, hospitality and leisure businesses operating from premises with a rateable value of between £15,000 and £51,000 | Automatic from Local authorities Ministry of Housing, Communities & Local Government has published guidance for local authorities |
| Coronavirus Business Interruption Loan Scheme |
Government provides 80% guarantee against debt finance and will cover fees and the first 12 months’ interest payments for facilities up to £5m. Loans available for up to 6 years | British Business Bank via participating providers UK businesses with turnover up to £45m eligible |
| Time To Pay | Case-by-case arrangements for businesses and self-employed people in financial distress, and with outstanding tax liabilities (see below) |
HMRC Dedicated HMRC helpline is 0800 0159 559 |
| Covid Corporate Financing Facility | Larger business ‘making a material contribution to the UK economy’ can finance working capital by selling commercial paper maturing in 1 week to 12 months. Businesses do not need to have previously issued commercial paper. Businesses must be in ‘sound financial health’, evidenced by an appropriate credit rating. | Bank of England via banks |
| Coronavirus Job Retention Scheme
|
Government grants for up to 80% of salary of employees who would otherwise be laid off and are furloughed up to £2,500 per employee, backdated to 1 March | HMRC Scheme to be opened “before the end of April” |
| VAT | The next quarterly VAT payments due between 20 March and 30 June will be deferred until 31 March 2021. VAT returns should still be filed on time | Automatic No application needed, though direct debits may need to be cancelled |
| Business rates holiday for nursery business | Business rates holiday for 2020/2021 tax year for properties rented by Early Years nurseries | Automatic from Local Authorities via (reissued) council tax bill |
| Technology challenge to support people who are self-isolating | Funding of up to £25,000 available to technology companies who can find digital ways to support people staying at home, e.g. providing remote social care, boosting volunteer sector, improving mental health support | NHS TechForce19 |
| Protection from eviction | Commercial tenants who cannot pay their rent until 30 June protected from eviction. However, this is not a rental holiday | Automatic |
| Extension for filing accounts | Businesses can apply for a three month extension for filing accounts, which will be automatically granted if delay is due to Covid-19 | Companies House |
Support for individuals
| Relief | Details | Administrator |
| Income tax | Income tax self-assessment payments due on 31 July 2020 deferred till 31 January 2021. No penalties or interest | Automatic No application needed |
| Universal credit | Self-employed people can now access full universal credit at a rate equivalent to statutory sick pay | HMRC |
| Mortgage holiday | Mortgage borrowers can apply for a 3 month payment holiday. Both residential and buy-to-let mortgages are eligible. Interest will continue to be charged on the amount they owe and didn’t pay | Direct from lender |
| Rent holiday | Tenants can apply for a 3 month payment holiday. No one can be evicted from their home or have their home repossessed over the next 3 months | Direct from landlord |
| Refund of season tickets | People working at home can apply for a refund of their season tickets | Relevant rail operators, including Transport for London |
| Hardship fund | £500 million fund to provide council tax relief to those receiving Local Tax Council Support | Local Councils |
Other measures
- Mortgage lenders have agreed they will support customers that are experiencing issues with their finances as a result of coronavirus, including through payment holidays of up to 3 months. This will give people the necessary time to recover and ensure they do not have to pay a penny towards their mortgage in the interim
- It’s been confirmed that government advice to avoid pubs, clubs and theatres etc is sufficient for businesses to claim on their insurance where they have appropriate business interruption cover in place for pandemics
- To support the food industry and help provide meals for people who need to self-isolate, planning regulations will be relaxed to allow pubs and restaurants to start providing takeaways without a planning application
For the latest details, please check the HM Treasury page COVID-19: support for businesses.
More advice on how to improve your cashflow through lockdown can be found on our blog.
HMRC and Time To Pay
For those who are unable to pay due to coronavirus, HMRC will discuss your specific circumstances to explore:
- Agreeing an instalment arrangement
- Suspending debt collection proceedings
- Cancelling penalties and interest where you have administrative difficulties contacting or paying HMRC immediately
More details are available on the government page If you cannot pay your tax bill on time.
There’s never a good time to be the subject of a tax investigation, but our experienced team can help you secure the best possible outcome. Find out more on our tax investigations page.
We also offer a Tax Fee Protection Service to give clients increased peace of mind in case of an HMRC investigation. There’s more information about the service here.
Monitoring cashflow
Over the coming months, many SMEs will be paying closer attention to their business cashflow and the processes related to it. Our suggestion to clients would be to use what may be a quieter time to talk to us about outsourcing and get on top of your bookkeeping, so that you have the numbers to monitor their cashflow and provide them to lenders, including HMRC when agreeing Time To Pay or loans.
For more information, please see our dedicated page on responding to coronavirus, our advice on Covid-19 for investors or get in touch using our enquiry form.