Businesses have been severely affected and business owners have been left thinking how they can continue. To try and safeguard and protect businesses and livelihoods, the Government has announced some unprecedented financial support, but what is available out there and how do you access it?
One of the biggest costs for most businesses is their wage bill. To help businesses retain staff and be ready to get going again when this is over, the Coronavirus Job Retention Scheme has been launched.
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This is a commitment by the Treasury to pay 80 per cent of employees’ usual wages (up to a maximum of £2,500 per month), providing the employees are kept on the business payroll. This relief can be backdated to March 1 and the funding will be available via your HMRC payroll system.
This scheme is currently in place for an initial three-month period, and it is anticipated that the payments to businesses will be up and running by the end of April. Also, to assist with staff costs there is a more generous Statutory Sick Pay (SSP) offering, to facilitate employees self-isolating. SSP can be claimed from the first day of absence, up to a period of 14 days of self-isolation. This can be claimed if you are self-isolating for any reason, not only if you are personally affected.
Other significant costs faced by most business are business rates and VAT. For businesses in the retail, leisure and hospitality sector, there is a 12-month business rates holiday. If your business is within this category, your local authority will inform you of the relief. Also, VAT bills that fall due for payment between now and the end of June 2020 can be deferred. They will however need to be repaid by the end of the 2020/21 financial year, so the benefit comes from relieving immediate cashflow pressures.
In recognition that businesses face other costs too, there are further grants available. Again, for the retail, leisure and hospitality sector, there are grants available based on property rateable values. A grant of £10,000 is available for England-based businesses working from premises with a rateable value of up to £15,000. For rateable values between £15,001 and £51,000 in England, and between £12,001 and £51,000 in Wales, the grant increases to £25,000. For small businesses generally, who qualify for Small Business Rates Relief or Rural Rates Relief there is a grant available of £10,000 (in England and Wales).
All grants will be administered by your local authority, and they will write to those eligible businesses stating what grants they are entitled to.
If further financial support is required, there are business loans available with 12-month interest holidays. These can be up to a value of £5 million and your bank will be able to give guidance on eligibility and processes. These are commercial loans, so will need to be applied for, and repaid as usual.
The Government has also reminded businesses of the Time To Pay facility. This is an arrangement whereby HMRC may agree a payment plan if funding existing tax liabilities is going to be difficult.
Finally, a word of caution. In these difficult and trying times, unfortunately some people see an opportunity for a new scam. We have heard of emails being sent claiming to be from HMRC to initiate some of this funding. Please be extra vigilant and approach any suspicious emails or phone calls with caution.
These are indeed unprecedented times, leading to this significant government support package. The above is a brief summary of the current business support available. This is evolving and changing almost daily with further details and guidance on implementation being released. If you would like to understand any of the above measures in more detail, please don’t hesitate to email me on email@example.com