Coronavirus Updates

Since the Spring Budget 2020 on 11 March, the Government has continued to announce a series of measures designed to counter the threat posed to the UK economy by the outbreak of the coronavirus that causes the respiratory disease COVID-19.

This post summarises all measures so far announced and provides up-to-date information on how you can:

  • find out more about each measure from reliable sources and
  • help your UK business clients access the support on offer.

It will be updated regularly as new information emerges on eligibility and how businesses can access each service or fund.

Further information

COVID-19 1: Overview

Updates from 12th May

The Coronavirus Job Retention Scheme is to be extended by four months until the end of October and employers will be able to bring back furloughed employees part-time, as part of the government’s plans to ‘re open the economy’, the Chancellor has announced.

This extension will mean the government will have provided a total of eight months of support to UK workers and businesses during the pandemic, with workers continuing to receive the same level of support of 80% of their current salary, up to £2,500 a month.

The Chancellor has indicated that there will be no changes whatsoever until the end of July.  However, from August to October the scheme will continue for all sectors of the UK but with greater flexibility to support the transition back to work, including employers using the scheme being able to bring back furloughed workers part time whilst paying a share of the cost of salaries. 

Full details are due to be released by the end of May.

Updates from 4th May

The chancellor has announced a new Bounce Back loan scheme, allowing small businesses hit by the impact of coronavirus measures to apply for up £50,000, with the government guaranteeing 100% of the advance.  Businesses can apply - using a two-page standard form, with no forward-looking business viability tests or eligibility criteria - for a minimum of £2,000 up to a maximum of £50,000 or 25% of business turnover with the Government paying the interest for the first 12 months. The scheme is now open and loans should be paid within one or two days after being approved.  Businesses -  which must not have been in difficulties at 31st December 2019 and must have sufferred as a result of coronavirus -  will be able to obtain the loans through the existing accredited lender network - normally their bank. Further details are available here:  https://www.british-business-bank.co.uk/ourpartners/coronavirus-business-interruption-loan-schemes/bounce-back-loans/faqs-for-small-businesses/

Updates from 20th April

From today it is possible to make your online claim from HMRC under the coronavirus johttpsb retention scheme. We can help you do that.  We do advise every employer to read the guide which HMRC has produced which you can find here: step-by-step guide

Updates from 14th April

The Government and HMRC have now confirmed that they are testing the on-line system they have developed to enable employers to reclaim the 80% of the amounts paid to furloughed staff (with upper limits) under the coronavirus job retention scheme. The system is expected to go live within the next week.  Do contact us if you would us to help you make your claim.

Updates from 3rd April

The Government is extending the special Business Interruption Loan Scheme to include all viable small businesses and not just those unable to secure normal commercial lending.  In addition, for loans under £250,000 personal guarantees will not be required.

Updates from 27 March

Full guidance has now been published setting out how businesses can claim through the coronavirus job retention scheme. Some key details are as follows:

  • Only employers that created and started a PAYE payroll scheme on or before 28 February 2020 are eligible.
  • The scheme covers full-time employees, part-time employees, employees on agency contracts and employees on flexible or zero-hour contracts.
  • Employees made redundant after 28 February 2020 but rehired by their employer can be furloughed.
  • Employees hired after 28 February cannot be furloughed.

To make a claim, employers will need to provide:

  • ePAYE reference number
  • number of employees being furloughed
  • the claim period
  • amount claimed
  • bank account number and sort code
  • contact name and number.

26 March: Support for self-employed people, at last

Having been under pressure for the past week, Chancellor Rishi Sunak has announced measures to support self-employed people whose earnings have been affected by the coronavirus outbreak.

Self-employed income support scheme (SEISS)

  • Those who are already self-employed and facing financial difficulties are asked to apply.
  • The scheme will cover up to 80% of average profits over the past three years, up to £2,500 per month, for at least three months.
  • Those with trading profits of more than £50,000 are not eligible.
  • Eligibility is determined with reference to earnings in 2018/19 as reported on tax returns filed this year.
  • What next? Application will be to HMRC via an online platform, yet to launch. The grants probably won’t be available until June 2020, backdated to 1 March. In the meantime, self-employed people who can’t work are expected to claim universal credit, access to which was broadened in the Spring Budget.

A frequently asked question has been “What about the directors of single-person limited companies?” The guidance says: “If you’re a director of your own company and paid through PAYE you may be able to get support using the Job Retention Scheme.” That suggests anyone drawing the majority of money from their business in the form of dividends will miss out on support.

Updates from Wednesday 25 March

Further to the news below that Companies House would automatically be giving those who need it a two-month extension on filing their accounts, the Government has now confirmed an automatic three-month extension for businesses that need it:

As part of the agreed measures, while companies will still have to apply for the 3-month extension to be granted, those citing 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.

A new note has been added to the guidance on deferral of VAT payments reminding businesses that pay by direct debit to cancel if they want to defer payment:

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

The Scottish Government has published guidance on its support for businesses in Scotland, with some specific differences:

  • The threshold for £25,000 grants for small business is £18,000 rather than £15k, as in England.
  • All non-domestic properties in Scotland will get 1.6% rates relief, applied automatically.
  • Retail, hospitality and leisure businesses will get 100% rates relief, as in England, also applied automatically.

Guidance from the Welsh Government is also now available. One notable difference is that the threshold for the £25,000 grant payment for retail, leisure and hospitality businesses is £12,000 – lower than in England or Scotland.

Businesses in Wales can also access loan and equity funding via the Development Bank of Wales.

Updates from Tuesday 24 March

Fuller detail of the retail, hospitality and leisure grant (RHLG) fund has been published by the Department of Business, Energy and Industrial Strategy (BEIS). The guidance document, intended to help local authorities administer the scheme, is available on the Government website.

  • Payments will be made to the person listed in local authority’s records as the ratepayer for the business premises on 11 March 2020.
  • There is a strong warning against fraudulent claims with a promise of prosecution and clawback for any such payments.
  • Certain premises are excluded on the grounds of private use, such as private stables and beach huts. Car parks and parking spaces are also ineligible.
  • Businesses in liquidation or dissolved as of 11 March aren’t eligible either.

The Coronavirus Bill currently before Parliament now includes an amendment calling for support for the self-employed and freelancers in line with that being provided for employees under PAYE via the coronavirus job protection scheme. It was passed by the House of Commons last night and will now go to the House of Lords for scrutiny. The Chancellor is expected to announce provision for the self-employed tomorrow, 25 March.

Updates from Monday 23 March

The scheduled 5pm press conference was cancelled and the Prime Minister instead addressed the nation at 20:30 announcing, to all intents and purposes, a total lockdown of the UK. Movements are to be restricted and non-essential shops are to close.

This means expected clarifications on how businesses can access support are likely to be delayed until later in the week.

As scheduled, however, the British Business Bank has published comprehensive details of how the coronavirus business interruption loan scheme (CBILS) can be accessed:

  • Eligibility: an SME must be UK-based with annual turnover of less than £45m and have a proposal which would be considered viable by the lender under normal circumstances.
  • Types of finance available: Term loans, overdrafts, asset finance, invoice finance.
  • How to apply: via one of the accredited lenders on this list. In the first instance, the British Business Bank is urging businesses to apply online and asking those who don’t need emergency finance to ‘consider the urgency of your need’. More detail is available here.

In other news, Companies House has confirmed that, in line with its existing rules, firms that were unable to file accounts on time can apply for a deadline extension, with an automatic two-month extension for those in isolation. There’s more information on that at AccountingWEB.

COVID-19 business bulletin 21.03.2020

Measures announced on 20 March

On the evening of 20.03.2020 the Prime Minister announced further restrictions on the compulsory closure of bars, cafes, pubs and restaurants.

Alongside these new measures, the Chancellor announced a further package of support for businesses facing the prospect of having to reduce staff numbers.

Coronavirus job retention scheme

  • Grants of up to £2,500 per employee where those employees are unable to work (are ‘furloughed’) because of coronavirus, covering 80% of salary costs.
    Intended to run for three months in the first instance with the first payments expected in early April and the scheme fully up and running by the end of that month.
  • The grants will be paid via HMRC.
  • All UK employers will be eligible.
  • What next? At present, no information has been provided on how to apply. Though it is generally understood to mean ‘stood down but still employed’, there is as yet no official definition of ‘furloughed’. It is unclear whether employers will be expected to make up the remaining 20% of salary.

Extension of the coronavirus business interruption loan scheme (CBIL)

  • Maximum turnover for eligible businesses was previously set at £41 million per year; it has now been increased to £45m.
  • The interest-free period has been increased from six months to twelve.
  • The scheme is being managed by the British Business Bank but businesses will access them via one of 40 accredited lending providers, including most major banks.
  • The maximum value of a facility provided under the scheme will be £5 million – higher than the £1.2m announced initially.
  • What next? Discuss business plans with existing lending providers. Loans will be available from Monday 23 March 2020.

Deferral of tax and VAT payments currently due

  • VAT payments from UK-based VAT registered businesses due between 20 March and 30 June 2020 won’t need to be paid to the usual deadlines, with payment deferred until the end of the tax year.
  • Self-assessment income tax payments for the self employed which were due on 31 July 2020 can now be deferred until 31 January 2021.
  • What next? Both deferral schemes apply automatically with no application required.

Access to welfare for the self-employed

  • The minimum income floor for access to universal credit has been suspended for self-employed people affected by the economic impact of coronavirus.

Measures announced on 17 March

At a press conference on 17 March, the Chancellor announced a package of support worth £350 billion – around 15% of the value of the entire UK economy.

It came upon the heels of a statement from the Prime Minister on 16 March which urged people to stop visiting cafes, pubs and restaurants.

It was intended to send a strong signal to British businesses not to act hastily in downsizing because support would be forthcoming.

Extension of business rate discount

  • All hospitality, leisure and retail venues in England, regardless of rateable value, can now claim a 100% discount on business rates for 12 months from 1 April 2020 to 31 March 2021.
  • Unoccupied properties that become vacant in the next 12 months will be charged 100% full rates from three months after they become empty.
  • What next? The discount will be applied automatically to the next council tax bill, due in April 2020.

Cash grants for very small businesses

  • Hospitality, leisure and retail businesses operating from units with rateable values between £15,000 and £51,000 will receive a grant of £25,000.
  • Businesses in these sectors with a rateable value of less than £15,000 will receive a grant of £10,000.
  • Those with a rateable value of more than £15,000 will receive £25,000.
  • Your local authority will contact you if you are eligible for this grant.
  • What next? Await notification from local authorities.

Measures announced in Spring Budget 2020

In what the Office for Budget Responsibility called the “largest Budget giveaway since 1992”, Rishi Sunak announced business support measures worth billions. Events have moved quickly, though, and many of the specific measures announced have now been superceded or further extended.

Grants for businesses receiving SBRR or RRR

  • Businesses in England eligible for small business rate relief (SBRR) or rural rate relief (RRR) will receive a one-off cash grant of £10,000.
  • What next? This will be processed automatically by local authorities.

Statutory sick pay reclaim scheme for SMEs

  • Small-and medium-sized businesses and employers will be able to reclaim statutory sick pay (SSP) paid for sickness absence due to COVID-19.
  • The refund will cover up to two weeks’ SSP for each member of staff off work because of COVID-19.
  • It applies to all UK businesses that employed fewer than 250 employees as of 28 February 2020.
  • What next? Legislation needs to pass before details of how to apply can be published.

Interest rates

  • On 19 March 2020 the Bank of England cut interest rates to a historic low of 0.1%, having previously reduced them to 0.25% on the day of the Spring Budget.

 

Further information