Flat Living Insurance provides an overview of the governments support for businesses in the wake of the Coronavirus crisis.
The Government have issued statements detailing the measures they are taking to assist businesses during this very difficult time. Some things to be aware of are:
- Coronavirus Job Retention Scheme
- Deferring VAT and Income Tax payments
- Statutory Sick Pay relief package for SMEs
- 12-month business rates holiday for all retail, hospitality and leisure businesses in England
- Small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief
- Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000
- Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
- New lending facility from the Bank of England to help support liquidity among larger firms, helping them bridge coronavirus disruption to their cash flows through loans
- HMRC Time To Pay Scheme
Coronavirus Job Retention Scheme
This scheme has been initiated to assist businesses to retain valuable employees which otherwise, due to the lack of work, would be laid off. The employees are excess to the volume of work available due to the effects of the Coronavirus and they are sent home until work is available. The Government will subsidise the company by providing 80% of these employees’ salaries up to a maximum of £2500 per employee per month.
Deferring VAT payments
The deferral will apply from 20 March 2020 until 30 June 2020.
This is an automatic offer with no applications required. Businesses will not need to make a VAT payment during this period. Taxpayers will be given until the end of the 2020 to 2021 tax year to pay any liabilities that have accumulated during the deferral period. VAT refunds and reclaims will be paid by the government as normal.
Deferring Income Tax payments
For Income Tax Self-Assessment, payments due on the 31 July 2020 will be deferred until the 31 January 2021.
This is an automatic offer with no applications required.
No penalties or interest for late payment will be charged in the deferral period.
HMRC have also scaled up their Time to Pay offer to all firms and individuals who are in temporary financial distress as a result of Covid-19 and have outstanding tax liabilities
SSP due to Coronavirus sickness
The Government have speeded up the time for claiming SSP
The £10,000 rates grant is paid automatically by the local authority to those businesses registered as claiming Small Business Rates Relief. The £25,000 grant is specific to nature of trade and rateable value.
Coronavirus Business Interruption Loan Scheme
This scheme enables businesses that were viable before the virus outbreak to apply for loans which, if not within the banks normal lending criteria, for example due to lack of security, can be 80% guaranteed by the Government in order to allow the banks to bring the loan into acceptable terms to lend. It should be noted that if security is available then the bank will take that security and the guarantee is only applicable where the bank would not normally be able to lend.
Covid-19 Corporate financing facility
The Covid Corporate Financing Facility (CCFF) provides funding to businesses by providing Commercial Paper of up to one year maturity, issued by firms making a material contribution to the UK economy. It will help businesses across a range of sectors to pay wages and suppliers, even while experiencing disruption to cash flows.
The facility will offer financing on terms comparable to those prevailing in markets in the period prior to the Covid-19 economic disruption, and will be open to firms that can demonstrate they were in sound financial health prior to the disruption. The facility will look through temporary impacts on businesses balance sheets and cash flows by basing the businesses eligibility on their credit rating prior to the Covid-19 disruption. Businesses do not need to have commercially issued paper in order to participate.
To obtain further information on the CCFF, including the practical steps you need to take, please visit the Bank of England website: